This circular provides clarification on the scope and distinction between entries relating to job work services and manufacturing services under Heading 9988 of Notification No. 11/2017–Central Tax (Rate), following the GST rate reduction on job work services with effect from 1 October 2019.

Doubts had arisen that the insertion of entry (id), prescribing a 12% GST rate for services by way of job work, made entry (iv), which attracts GST at 18% for manufacturing services on physical inputs owned by others, redundant. The circular clarifies that both entries operate in distinct and clearly demarcated fields.

Entry (id) applies only to job work services as defined under section 2(68) of the CGST Act, that is, treatment or processing carried out on goods belonging to another registered person. In contrast, entry (iv) specifically excludes job work services and applies to manufacturing services performed on goods owned by persons who are not registered under the CGST Act.

Accordingly, the circular confirms that the reduced GST rate of 12% applies strictly to job work services involving goods of registered persons, while manufacturing or processing services on goods owned by unregistered persons continue to attract GST at 18%. This clarification ensures correct classification and uniform application of GST rates across field formations.